In Bahrain, the social insurance service is governed by the social insurance law of 1976.
The system covers Bahraini employed persons in establishments with one or more employees or working in one of the Gulf Cooperation Council countries (Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates). Household workers, certain groups of agricultural employees, casual workers, temporary noncitizen workers, and other groups as specified by law are excluded from the system. Further, public-sector employees have a special system.
Coverage is voluntary for those persons with 5 or more years of previous compulsory social security coverage but who are no longer covered on a compulsory basis, self-employed persons, and other Bahraini citizens working abroad. Voluntary contributors are covered for old-age, disability, and survivor benefits.
Funds are contributed by both the insured person and its employer in the following proportions: (i) Insured person: 6% of total monthly earnings; and (ii) Employer: 9% of the employee's monthly earnings. The maximum monthly earnings used to calculate contributions are 4,000 dinars (approximately USD 10,600).
In the case of self-employed persons, the contribution amounts to 15% of monthly income for voluntary contributors. The monthly income used to calculate contributions is chosen by the self-employed person when joining the system but must be between 200 dinars (approximately USD 530) and 1,000 dinars (approximately USD 2660); thereafter, the monthly income used to calculate contributions may be increased or decreased annually by up to 5% but must be between 200 dinars (approximately USD 530) and 1,500 dinars (approximately USD 4000). For those making voluntary contributions, the contribution amounts to 15% of declared monthly income.
The conditions for retirement are: (i) 60 years old for men and 55 years old for women; and (ii) at least 10 years of coverage. Early pension is possible with at least 20 years of coverage (men) or 15 years of coverage (women).
Retirement from usual employment is necessary. Pensioners may work in a new job as long as the combined income from a pension and the job does not exceed the amount earned in the last job before retirement. If the insured person does not meet the contribution conditions for the normal old-age pension, old-age settlement is paid at age 60 for men or at age 55 for women.
The monthly pension is 2% of the insured's monthly average earnings in the last 2 years multiplied by the number of years of contributions. The maximum contribution period used to calculate the pension is 40 years (up to 5 years of credited contributions may be used to calculate the pension if the insured's total contribution period does not exceed 30 years).The minimum pension is the insured's average contributory wage during the last 2 years or 180 dinars (approximately USD 480) a month, whichever is less. The contributory wage is the total monthly wage received in January of each year. The maximum pension is 80% of the insured's average earnings plus an additional 10% of the pension. Instead of an additional 10%, the beneficiary can opt for a lump sum of 3% of the monthly average earnings in the last 2 years multiplied by 12 times the number of years of coverage. A lump sum of 11% of average earnings in the last 2 years is paid for each contribution year over 40.
In case of early pension, the pension is reduced by 20% if the insured retires before age 45, by 15% if aged 45 to 49, or by 10% if aged 50 to 54.
Benefits are increased by 3% every January.
Source: Social Security Programs Throughout the World: Asia and the Pacific, 2010, available at http://www.ssa.gov/policy/docs/progdesc/ssptw/2010-2011/asia/index.html